Published: 24-12-2018 12:21

Stern Groep N.V., the listed Dutch market leader in automotive retail, presents its new strategic plan for 2019 – 2022 to investors and analysts at a Capital Markets update today. An important part of Fast Forward Reloaded, the name of the strategic plan, is the search for a strategic partner for the lease activities, subject to this delivering mutual benefits. Stern intends to sell its lease portfolio to a lease partner, that in exchange will make solid commitments regarding the long-term supply of services by Stern Group in relation to the purchase of cars, maintenance, repairs, car body repairs and rental of cars and alternative electric forms of transport.

Fast Forward Reloaded

Since its incorporation in 1993, Stern Group has been working on an integrated mobility proposition in which the various activities strengthen each other. Stern itself thus provides a proportion of the necessary revenue and added value per business unit and can therefore position itself more independently with respect to large parties in the automotive sector such as importers, insurers and lease companies.

For the success of this strategy, keeping our own mobility services such as insurance and finance on our balance sheet is not necessary. For instance, there was the successful sale of Stern Finance B.V., our own intermediary for retail and commercial finance and insurance, to Bovemij in 2010. Stern has continued to sell an increasing volume of finance and insurance products  to consumers and businesses since that time. Under the agreements made, Bovemij has been assured of a steady stream of new contracts and Stern has been able to count on the referral of services such as the car body repair activities to its own repair network.

Despite the strong organic growth of Stern’s own lease portfolio in recent years, the management is convinced that Stern will not be able on its own to develop this business to a sufficient scale in relation to the other activities of the group. The consolidation already under way in the lease market is currently accelerating as a result of mergers and acquisitions, and the growing popularity of private lease. As a result of this consolidation, there will be fewer and fewer parties with a hold on the part of the Dutch fleet that is relevant for Stern. To maintain and increase its hold on this part of the fleet, Stern believes there will be great benefits from an intensive cooperation with a strategic partner in leasing that will benefit from a dealer group with a large dealer network, many leading brands and direct contact with a large customer group.

As part of the envisaged strategic cooperation, Stern will sell its lease portfolio. Besides the proceeds from the sale, Stern intends to conclude a multi-year agreement on bringing in lease contracts under its own label via its own dealer network and on the supply of cars and maintenance, repairs, car body repairs and replacement vehicles. Stern’s lease portfolio is highly attractive for other lease companies, since Stern’s customers come mainly from the small business market, a market segment in which currently all the lease companies are hoping to achieve their profitable growth.

Stern proposes to use part of the proceeds of the sale of the lease portfolio to accelerate the planned digitalisation of the company, optimising its dealer network and expanding its SternPoint network to a nationally relevant scale.  After re-arranging the group’s finance, Stern will distribute dividend and/or repurchase its own shares in accordance with its current dividend policy based on excess solvency.

Follow-up 

After the trading update of 14 November, in which Stern announced that it would be reviewing the strategic options for SternLease, positive exploratory talks have taken place. Important decisions will be taken in the coming months. ING Corporate Finance and Van Doorne have been engaged by Stern as financial and legal advisers respectively. Once the terms of the deal and following steps are clear, Stern Group will issue a press release without delay and convene an Extraordinary Meeting of Shareholders.

Klik hier voor de pdf van het volledige persbericht d.d. 20 december 2018

Press here for the press release dated 20 December 2018 in English